In recent years a number of governments have experimented and tested radio frequency identification devices (RFIDs) as a means for confronting counterfeiting problems. These RFID tags include a tiny microchip that is embedded in currency notes or bank notes to detect and prevent counterfeiting. The RFID chips offer two advantages. First, the chips can perform limited computations and can even interact with a reader and would not need an internal power supply. The chips can be powered by a smartphone's battery. Second, some RFID chips have writable memories and contain the required information to ensure counterfeit verification and the original authentication.
An RFID chip or tag is a tiny device embedded in bank notes that is capable of transmitting over a short distance certain data information. A NFC (near field communication) enabled mu-chip will automatically connect via a near field communications (NFC) enabled Wi-Fi or Bluetooth to the RFID bill tag using the smartphone's integrated lithium batteries power for the tags active operation. NFC standards cover communication protocols, exchange data formats and are based on existing RFID standards including ISO/IEC 14443 and FeliCa3. Further, NFC devices can receive and transmit data simultaneously. Thus, they can provide a collision detection property if the received and transmitted signals frequencies are not matched.
The European Central Bank (ECB) announced the inclusion of RFID tags in all Euro notes above 20 from February 2007 to improve counterfeit detection and to counter the laundering of Euro bank notes. In the European system, the chip beams a 128 bit code which includes the note's value and serial number to a receiver which in turn uploads the data to the European Central Bank's central database where the tracing and linking algorithms checks aggregate data for suspicious activity.
More recently, Hitachi, the Japanese semi-conductor firm has presented a prototype of its tiny RFID mu-chip which is a microchip with a built-in antenna. An advantage of putting the antenna right in the chip is that it shortens the read range which serves the privacy concerns, in other words to achieve the near field communication criteria. This allows simplified transactions, data exchange and wireless connections between two devices in close proximity to each other.
The U.S. Government is also considering embedding RFID chips in a new one dollar coin in a test to see if the technology can be adapted for larger denominations. The plan calls for inserting the RFID device in a fixed percentage of coins in order to test the feasibility of large scale deployment.
A U.S. Pat. No. 7,221,258 of Lane et al. discloses Hierarchical Electronic Watermarks and Methods of Use. The patent discloses a method and apparatus for authenticating currency wherein the currency contains a substrate such as paper and an embedded RFID transponder. An embedded RFID transponder or electronic watermark may contain multiple hierarchical layers of electronic passwords that are used to electronically protect the host currency from counterfeiting, or unauthorized modification. In addition, such intelligent RFID tags may uniquely identify, a particular document and data relating to the document. The authenticating agency can utilize a public or private Electronic Product Code database as a means for the authenticating agency and third parties to authenticate documents and data in documents. The intelligent interactive Electronic Product Code can be used as an anti-counterfeit mechanism enabling third parties requests to provide services, benefits or monetary payments to authenticate documents and prevent the use of counterfeits.
A more recent U.S. Pat. No. 7,606,557 of Park et al. discloses a mobile communication terminal having a tag read function and method for providing a genuine product authentication service. The mobile communication terminal having the tag read function specifies an encryption key corresponding to an encryption key stored in the tag from its own plurality of encryption keys based on a signal received from the tag. The mobile communication terminal receives an encrypted product code or product information from the tag and decrypts the product code using an encryption key. The mobile communication terminal outputs a result of the encryption on a liquid crystal display (LCD) window or as sounds or voices.
Finally, a U.S. patent of Pareskevakos U.S. Pat. No. 7,724,938 discloses a system and method for intelligent currency validation. As disclosed currency is validated by comparing identifying information extracted from the currency such as a serial number associated with the currency, to identify information in a list corresponding to invalid currency such as counterfeit currency. If the extracted identifying information matches identifying information on the list, the currency is deemed invalid. A photograph or thumb print image can be obtained by a person using the invalid currency to help in later identification of that individual. Optical character recognition techniques can be used to extract the identifying information.
The aforementioned systems and methods offer one approach to preventing the use of counterfeit bank notes using RFID chips, embedded in the currency notes. Nevertheless, it is currently believed that there is a need for an improved system and method in accordance with the present invention. It is believed that there is a need and a potential market because none of the systems known to Applicant detect a counterfeit note with 100% confidence. The duplication in the prior art systems may be difficult, but it is probable that it will be done. Thus there is a need for Applicant's system and method. Another advantage of Applicant's system and method is that an individual can verify a bank note using a smartphone without going to a facility or making personal or direct contact with an agency.